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Kentucky’s 2018 Medicaid Updates Explained

Kentucky’s 2018 Medicaid Updates Explained

Update: A federal judge has blocked Kentucky’s plan to impose Medicaid work requirements.

On January 11, 2018, the Centers for Medicare and Medicaid Services announced a new policy under the Trump administration regarding community engagement for able-bodied adults enrolled in Medicaid. A letter was sent the same day to all state Medicaid Directors detailing the new policy, which will allow states to require working-age, non-pregnant, non-disabled individuals to be engaged in work or other “community engagement activities,” including skills training, education, job searches, volunteering or caregiving as a condition for Medicaid eligibility. Kentucky became the first state to obtain approval to implement such a requirement.

Kentucky is Instating a Work Requirement

Following the new CMS policy, Kentucky’s work requirement proposal was approved on January 12, 2018. The majority of the regulations, called Kentucky HEALTH, will go into effect July 1, 2018. Under the new requirements, adults age 19 to 64 must complete 80 hours of community engagement a month, including work, school, training or volunteering to maintain their eligibility, unless they meet a specified exemption. Exemptions include a disability, pregnancy, full time students, former foster care youth, and primary caregivers. Beneficiaries will have their eligibility suspended for failure to demonstrate compliance with the community engagement requirement, but will be able to reactivate their eligibility on the first day of the month after they complete 80 hours of community engagement in a 30 day period, or the completion of a state-approved health literacy or financial literacy course. Beneficiaries who are in an eligibility suspension and fail to meet the requirements by their redetermination date will have their enrollment terminated and will be required to submit a completely new application. Good cause exemptions relating to termination of benefits may be allowed under certain circumstances. Beneficiaries will be able to track their community engagement hours through the Citizen Connect website.

Dental and Vision Coverage Through Kentucky Medicaid Will Be Eliminated

Dental and vision insurance, which is currently covered by Kentucky Medicaid will be eliminated. However, these services may be earned back through a rewards system called My Rewards Account, with enrollees earning credit through incentives like getting an annual physical or completing a diabetes, weight management, or anti-smoking program. Enrollees may have started earning credit beginning April 1, 2018. The Citizen Connect website may also be used to check the balance of beneficiaries’ My Rewards Account, and learn how the Reward Dollars may be earned and spent.

Premium and Deductible Changes Are Coming

Additionally, enrollees will be required to pay premiums based on their income, which will range from $1 to $15 a month. Individuals with income above the poverty level (100-138% FPL) who do not pay premiums for 60 days will be locked out of the program for 6 months.

Able-bodied individuals will also have a $1,000 “deductible.” Non-preventative services will be tracked against the $1,000 balance in each member’s “deductible account.” At the end of the year, up to 50% of the remaining balance of the deductible will be transferred to the members My Rewards Account. Enrollees who use the entire $1,000 will still be able to access medical care for the remainder of the year and will not owe anything out of pocket.

Emergency Room Visits Could Include Penalties

Beneficiaries that make trips to the emergency room that are later determined to be a non-emergency will have an amount between $20 and $75 deducted from their My Rewards account. If the beneficiary calls their insurance company nurse hotline prior to going to the ER, the penalty will be waived, even if the visit is not an emergency. Beneficiaries that have no inappropriate ER visits in a year will receive a credit to their My Rewards account.

There Are New Restrictions For Retroactive Eligibility

Finally, retroactive eligibility will no longer be available for Kentucky HEALTH enrollees, except for pregnant women, children under 1 year old and former foster care youth.

A Lawsuit is Challenging These Updates

Following the waiver approval in January, a group of 16 Kentucky residents filed a lawsuit in the U.S. District Court for the District of Columbia arguing that the changes for Kentucky are illegal. The suit claims that Kentucky’s actions, and the federal government’s approval of the waiver, violated the Administrative Procedure Act (which requires a notice process for changes), the Take Care Clause (which requires that the President has the duty to take care that all the Laws passed by Congress shall be faithfully executed), and the Medicaid Provisions of the Social Security Act. Plaintiffs argue that through the approval of the Kentucky Waiver, CMS has attempted to re-write the Medicaid Act and abused the 1115 waiver process, expanding it beyond its intended purpose. Oral arguments expect to be heard on Friday June 15, 2018.

Two helpful websites for additional information are and the Kaiser Family Foundation.

Learn more about updates to others states’ Medicaid programs:

MedData Disclaimer – This document is provided for general informational purposes only and is not intended as legal advice. The providing of the information in this document is neither intended to establish an attorney-client relationship nor to expand the existing contractual relationship with MedData. MedData would recommend that you consult with your own internal legal resources before taking any action in reliance on this information.

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